NIFTY50: 19,439 ▲ 83 (+0.4%)
SENSEX: 65,617 ▲ 273 (+0.4%)
Howdy, folks!
Have you ever used ChatGPT to do your homework? Well, Costa Rican lawmakers did just that. They used the AI tool to draft a bill to regulate—wait for it—AI! They asked ChatGPT to “think like a lawyer” and draft a bill with the country’s constitution in context. The resulting text was sent verbatim to the legislature for approval. While the country’s legislators debate on the merits of the bill, let’s take a look at what happened in the markets today.
- Benchmark indices gained after taking a breather yesterday
- In all, 33 of the NIFTY50 stocks closed in the green
- Rupee rose by 21 paise against the US dollar, tracking the gains in other Asian currencies
Among the NIFTY sectoral indices, Auto (+1.3%) and FMCG (+1.2%) were the top gainers, while Bank (-0.2%) and Metal (-0.2%) were the top losers.
| Top gainers | Today's change |
| Eicher Motors | 3,262 ▲ 88 (+2.7%) |
| Sun Pharma | 1,073 ▲ 28 (+2.7%) |
| Tata Consumer | 842 ▲ 16 (+2.0%) |
| Top losers | Today's change |
| UPL | 644 ▼ 15 (-2.3%) |
| Bajaj Finance | 7,443 ▼ 90 (-1.2%) |
| Axis Bank | 954 ▼ 9.6 (-1.0%) |
What’s trending
⭐ Life insurance stocks gain on upbeat Q1 outlook
Shares of major life insurance companies witnessed strong traction with HDFC Life hitting a new 52-week high and ICICI Prudential trading close to its 52-week high. This comes after total premiums amassed by the private life insurers rose over 13% YoY to ₹11,990 crore in June 2023. Meanwhile, premium collection of state-owned LIC also witnessed a remarkable surge of over 20% YoY to ₹24,970 crore.
⭐ Minda Corp soars after bagging new order
Shares of automotive component maker Minda Corp rose 3.6% after the company bagged a significant contract worth ₹750 crore from a leading OEM (original equipment manufacturer) to produce battery chargers for electric vehicles (EVs). The company said that during FY23, EVs accounted for nearly 20% of the total orders bagged.
⭐ Tata Communications jumps after overseas acquisition
Shares of Tata Communications jumped nearly 7% after its wholly-owned subsidiary signed an agreement to buy the remaining 42% stake in France-based Oasis Smart Sim Europe (OSSE) for ₹99 crore. In 2020, Tata Communications had acquired a majority stake of 58% in OSSE. The acquisition is expected to be completed within a month, subject to legal compliances.
⭐ Greaves Cotton rallies on strong e-scooter sales
Shares of Greaves Cotton gained over 3% today after the company said its e-mobility arm sold over 2 lakh units of its “Ampere” brand e-scooters in the first quarter of FY24. In FY23, the company crossed the 100,000 sales milestone for its "Ampere" e-scooters. In Q4FY23, the company’s consolidated net profit jumped 60% to ₹26.7 crore, while revenues rose 33% to ₹827 crore.
In Focus
Tier-2 IT stocks outperform heavyweights
So far in 2023, large-cap IT stocks have given subdued returns to investors. Heavyweight stocks like Infosys and Wipro have given negative returns, while TCS gained only 0.5% year-to-date. Meanwhile, the NIFTY IT (+2.4%) index has underperformed compared to NIFTY 50 (+7.3%). On the flip side, mid and small-cap IT stocks like Cyient, Sonata Software, and Zen Technologies have gained in the range of 69% to 160% so far in 2023. Wondering why this is happening? Let’s explore.
As per experts, the rising number of small-sized deals secured by Tier-2 IT companies is one of the key factors driving their share prices. Amid weak global macroeconomic sentiments, clients are cutting down on IT spendings and reducing their deal size.
As deal sizes are getting smaller, it allows mid and small-cap IT companies to participate and secure such deals. Also, many Tier-2 IT firms have developed specialised domain expertise, which helps them add more value for their clients and secure deals that have niche requirements.
Further, these companies have smaller revenue bases compared to large players. Thus, even marginal revenue growth on smaller bases looks sizable for Tier-2 firms. Besides this, hopes of further consolidation in the industry through mergers and acquisitions is also one of the factors why investors are moving towards mid and small-cap IT companies.
As IT firms gear up for Q1FY24 results it would be interesting to see quarterly numbers of tier-2 IT firms. Keep reading this space for all quarterly updates.
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